SEC looks at Berkshire disclosure on Burlington: report

By IBT Staff Reporter On 05/05/10 AT 11:48 PM

The Securities and Exchange Commission is looking into disclosures made by billionaire investors Warren Buffett's Berkshire Hathaway Inc as it sought to purchase Burlington Northern Santa Fe Corp, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.

The SEC has been examining for several weeks how Berkshire, which bought the No 2. U.S. railroad company for $26.4 billion in February, informed other Burlington shareholders about its offer for the company in October 2009, the Journal wrote, citing those sources.

Prior to making its offer, Berkshire owned 22.6 percent of the railroad company. By law, major shareholders must inform other shareholders within days if they are planning to take control of the company and file an amendment of their securities holdings with the SEC.

Buffett submitted such a filing on November 3, a day after Berkshire and Burlington Northern entered into their merger agreement.

But according to a late November filing, Buffett first told Burlington Northern Chief Executive Matthew Rose on October 23, 2009 that he would not offer more than $100 per share for Burlington, the price at which Burlington Northern was ultimately valued in the cash-and-stock deal.

So far, the SEC is only looking at the facts of the transaction, the Journal reported.